Home Articles Economic and capacity implications of Geo-ICT

Economic and capacity implications of Geo-ICT

Walter T de Vries
Assistant Professor of Geo-information Management and Infrastructure

Sjaak J J Beerens
Director External Affairs of ITC, ITC, the Netherland
E-mail :[email protected]
Developments in Geographic Information Systems are increasingly influenced by global developments in Information and Communication Technology (ICT). Thus, one speaks of “Geo-ICT” developments that are taking place against the background of the establishment of (National) Geospatial Data Infrastructures ((N)GDI). While NGDIs are considered a mechanism to improve governance and sustainable development, in publicly financed production of geo-information, the economic and capacity implications for public use have until recently, received sporadic attention in Asia, Africa and South America.

Context of Geo-ICT developments

Context of Geospatial Data Infrastructures (GDI)
A GDI is defined as encompassing the networked geospatial databases and data handling facilities, the complex of institutional, organisational, technological, human and economic resources that interact with one another, implementation and maintenance of mechanisms facilitating the sharing, access to, and responsible use of geospatial data at an affordable cost for a specific application domain or enterprise (Groot and McLaughlin, 2000).

The GDI concept seeks to support sharing and optimal use of data in the national context through standards like a national spatial reference system, a national topographic template, a national elevation model, any other standardised spatial data set of national scope (geographical names, administrative boundaries, etc.), thematic data sets (soils, hydrology, vegetation, population, etc.) and meta data standards, to describe in a consistent manner each of the GDI holdings.

Figure 1: Geospatial data infrastructure
Groot and McLaughlin (2000) present the mechanisms through which this obligation can be met schematically (fig 1). Salazar and De Vries (2001) describe how this could be worked out taking into account national settings, particularly those of developing countries.

Globally there have been discussions and presentations through the Global (Geo-) Spatial Data Infrastructure (GSDI) consortium, with a working group on legal and economic issues – although the documents published so far relate mostly to North America and Europe. In addition, the economic issue was addressed at the UN Regional Cartographic Conferences (Asia and Pacific, and the Americas), as well as during the CODI (Commission for Development Information) meetings in Africa.

Academically, there are a few well structured publications dealing with the economics issue, including Rhind (in Groot and McLaughlin, 2000), Gupta (2000), Blakemore (2000), Groot (2001) and Van der Molen (2001a and b). Most of these apply almost exclusively to western countries such as Canada, the UK, the Netherlands, the USA and Australia. A few review and research the economic issues of geospatial information within the context of less developed countries. This reveals the difficulty in getting research questions on the table, particularly in the context of less developed countries.

Context: role and effect of Geo-ICT on economics
National surveys and cadastres, being in the business of information production and provision, are affected by Geo-ICT developments. The advantages of Geo-ICT result not only in a new range of products and services, but also in the universal availability of information and a decrease in the relative cost, thereby requiring a new paradigm of the impact of (Geo-)ICT. Castells (1996) describes this new paradigm, illustrating a number of significant characteristics:

  • Information is the raw material of the economy, where a focus on physical products is being replaced by digital products and services. The technologies (re)act on information not only as a product, but also as a production factor.
  • Persuasiveness of effects of new technologies (such as Internet, telematics) as they become part of every human activity. Opoku-Mensah (1998) describes how the private sector is “invading the South” with ICT, compelling governments to open up their information and communication systems and – more importantly – share their political power and reduce state involvement in the economy.
  • Networking logic. The morphology of the network of sectors and organisations adapts to new complex interactions. This leads to a change in the marketplace, and possibly a change in traditional customers and their behaviour. A customer becomes a partner rather than a target.
  • Flexibility of both processes and organisations. In their book on e-commerce, Turban et al. (2000) describe how the market place (physical) is changing into a market space (virtual), where mass production is becoming mass customisation.
  • Convergence of new technologies into highly integrated systems also results in growing integration of business firms in strategic alliances and cooperative projects, and increasing privatisation of governmental agencies.

This new paradigm is having a tremendous effect on the organisational structure and network of public geo-information providers, and on how, where and for how much their information can be delivered, produced and provided. It is against this background that GDIs are developing.
Table 1 Indicators to assess performance of national organisations

Indicator Description
Productivity improvement Increasing output to input ratio
Just-in-time A comprehensive production and inventory control programme
Total quality management Corporate-wide effort to improve quality translated into improvement indicators
Improved decision making Measurable effects of making better (measurable) and more timely decisions
Managing information and knowledge Quantitative indicators on storage, retrieval and use of information
Innovation and creativity Cost indicators to enhance the ability of people and processes to find new solutions to new problems
Change management Flexibility of processes to adapt to a new environment and change monitoring
Customer service This would include information on delivery time, distance to sales offices, etc; in the context of e-commerce. This would even include revenue (loss) because of inefficient websites and electronic front doors

Context: Stakeholders in GDI
The stakeholders can be categorised as follows:

  • At national and macro-level: National government politicians /politics providing policy direction on information acquisition and distribution, including the regulations and (economic and financial) conditions for acquisition and distribution, such as privatisation of government bodies, general pricing and cost-recovery strategies.
  • At institutional level: National surveys or organisations providing framework data, like national mapping agencies (NMA), national cadastres and (public) registers agencies, and national surveys on geology, soils, hydrography, etc.
  • At product mediation level: Geospatial Data Service Centres (GDSC), defined here as a facility or organisation that is the intermediary (“broker”) between the data suppliers and the data users for specific applications. A GDSC facilitates the integrity of access to the required data by ensuring the system technical services as well as the administrative, data security and financial services necessary to mediate between data suppliers and data users.
  • At public level: Users of the data and information, where a distinction can be made between the intermediate (value-adding) users or organisations and the end users (beneficiaries) of the information.

Economic implications

Effects and aims of public reforms
National surveys and cadastres, like many other (semi-) governmental organisations, are forced to undergo technical and organisational reforms in an economic development that has yet to prove where the exact economic benefits of the technology and the information lie (see also Nijkamp and Verrips, 2000). Public organisations and agencies in some countries have started this organisational reform, often aiming at more financial autonomy, (semi-)privatisation, increased drive and monitoring of performance, and enhanced service orientation and customisation.

Some of these requirements can be accommodated by Geo-ICT. These include customisation of information, which can generate increasing economic opportunities and bring benefits. On the other hand, it must be acknowledged that most western economies are already primarily service economies. Most of the GNP is generated by the service sector, allowing Geo-ICT to exert a greater influence on the GNP. In less developed countries this may not be the case. Yet there is the possibility of multiple, often unpredictable, applications of this information inside as well as outside government. In a study of the Australian land and geographical infrastructure activities, PriceWaterhouse concludes that return on investments may be up to 400% (PriceWaterhouse, 1995), although this is considered by some to be subject to further research in terms of uncertainties regarding the assumptions made in the calculation (Groot, 2001, p. 6).
Table 2 Shift from market place to market space

Shift from To
Mass marketing and advertisement Target, one-to-one interactive marketing and advertisement
Mass production (standard products, Services) Mass customisation
Monologue Dialogue
Paper catalogue Electronic catalogues
One-to-many communication model Many-to-many
Supply-side thinking Demand-side thinking
Customer as target Customer as partner
Segmentation Communities
Physical products and services Digital products and services
Branding, megabr Communication, diversity
Intermediation Distintermediation, new intermediation

National and macro level – policies and interest
Good governance needs an understanding of the physical, economic and human geography of a nation and the changes over time of that geography. It is in the interest of governments to finance the generation of foundation data for public interest, without actually looking at the economics, i.e. costs and benefits of that information generation and use, or assuming these benefits to far outweigh costs (Nijkamp and Verrips, 2000). Public interest can be served by policies and regulations that ensure:

  • Unlimited and efficient production and access to national foundation data for the purpose of governing
  • Broadest access to national foundation data for society
  • Lowest possible (transaction) cost to society as a whole
  • Optimal sustainable development by use of geospatial information.

The first two observations imply more effective governance and administration tools, the third a cost saving to society and the latter, economic benefits to society. However, the relation between the four is not evident, let alone measurable. For national mapping agencies, this would mean, for example, that one would like to measure (and quantify):

  • Financial efficiency gains of citizens and businesses when using and applying (improved) fundamental data sets
  • Efficiency gains of public administration, mainly in the back offices of public agencies that make use of and/or need fundamental topographic data for their daily work
  • Cost avoidance of maintaining and updating data by the public
  • Cost savings of duplication of data acquisition.

How can national policies and regulations on geospatial information can fulfil these targets? Performance at this level needs to be linked to national objectives and performance indicators, which in less developed countries generally relate to economic development and poverty alleviation.

Intermediate economic level – changes within organisations and institutions
The monopoly of mapping agencies on geo-information products has been changing since the broader introduction of ICT in society during the late 1970’s and early 1980’s. As a result, the private sector has been getting access to technology similar to that of national surveys, and could thus challenge these monopolies. Yet, Groot (2001) has argued that fundamental data sets are still the basis of all other geo-information data, and should therefore remain under government regulatory control. A more or less free marketplace could govern any value-adding data. This does not deny that government funded mapping agencies will have to deal with the implications of national policies of cost recovery and performance improvement. Governments are cutting the budgets of these agencies and looking for more structural solutions through revenue generation, cost recovery, performance measurement and enhancement, and, in the context of government reform, privatisation.
Table 3 Capacity building- Purpose and focus. (Adapted from Groot and Geogiadou, 2001)

Purpose Focus
Human resources development Supply of technical and professional personel
Organisational strengthening Strengthening the management capacity of organizations; embedding geo-information communication technology solutions (systems and processes) as well as strategic management principles
Marketing strengthening Strengthening the capacity to market products and services including general public relations skills
Institutional strengthening Strengthening the capacity of an organisation to develop and negotiate appropriate mandates and modus operandi as well as appropriate (new) legal and regulatory frameworks

One may conclude that on the one hand, government budgeting responds well to the requirements of a democratic parliament but, on the other hand, does not respond to the needs of a business administration. Consequently, the concept of “cost recovery” in the context of a government budgetary system can be best interpreted as a “recovery of expenditures”. Yet, one could question whether cost recovery is already a reasonable demand if the impact of the new technology is still in the phase of transposing or replacing traditional production systems. In this transition indicators to assess performance of national organisations may be as referred in table 1.

Product level – market, users and beneficiaries
Traditional geo-information markets have changed since the “democratisation” of Geo-ICT. The intrusion of Geo-ICT in organisations has affected producers, users and beneficiaries, as well as the market itself. Turban et al. (2000) describe this shift from marketplace to market space as mentioned in table 2.

From education to capacity building

Expertise requirements
Scientific, technological, social and economic developments in society and the increased demand for information have resulted in a proliferation of expertise fields. Looking at geo-informatics from the two angles:

  1. structure of processes and
  2. context in which these processes take place

Experts from one discipline can seldom address both. Geo-informatics always concerns an interdisciplinary context. Professionals in the field of GDI have to take this requirement into account throughout their career. The fact that the application covers a wide variety of fields, such as land registration and administration, natural resources management, disaster mitigation, etc., implies that specialisation (although within an interdisciplinary context) will be required for professionals to keep up to date with the state of the art in their field of expertise.

Education and training
The importance of GDIs for governance also has implications for the national (public) organisations responsible for establishing and operating them. Besides the education of individuals, capacity building of the entire organisation is required. The goal of education is to prepare professionals for their tasks ahead, while the goal of capacity building is to simultaneously shake up the organisation that will employ them. The aim is to strengthen an organisation so that it can assume responsibility for designing, managing and sustaining development. This is also required in marketing and public relations, as the national agencies associated with GDIs are not used to a client-and-market-driven way of doing business. For this, not only are thematic professionals required but also staff that can formulate, design, manage and negotiate with other organisations and central government in order to address organisational, marketing and institutional issues in support of the acceptance of technological solutions. Hence

capacity building comprises human resources development, organisational strengthening, marketing strengthening and institutional strengthening – of which education is part and parcel (table 3).

Challenges for educational organisations
The organisations involved in education and training in Geo-ICT have special requirements and challenges. Besides understanding and insight into the technological aspects of the processes, students need to be provided with knowledge and insight into the context of the various problem fields. Additionally, rapid technological developments and demand for information, imply the continuous upgrading of professionals as part of the “lifelong learning” principle. This in turn challenges training institutions to keep up to date with scientific and technological developments while simultaneously dealing with the proliferating variety in demand.

The aim of ITC is to provide international education through knowledge exchange directed at capacity building and institutional development for and in countries that are economically and technologically less developed. ITC’s activities concern the knowledge field centred on a core identified as “geo-information science and earth observation”. Geo-information science and earth observation comprise a combination of tools and methods for the collection, storage and processing of geospatial data, and for the dissemination and use of these data and of services based on these data.

  • This implies the development and application of concepts for spatial data modelling, for information extraction from measuring and image data, and for the processing, analysis, dissemination, presentation and use of geospatial data.
  • It also implies the development and implementation of concepts for the structuring, organisation and management of geospatial production processes in an institutional setting.

Within the framework of carrying out its mandate to build capacity through educating and training mid-career professionals in the developing world, ITC has acknowledged the fact that its role is changing rapidly. Knowledge and expertise have developed in many countries of the Third World and in some countries, India in particular, even surpassed those of ITC in certain specific fields. ITC recognises this new situation and are aware that the role will change from adviser and trainer to partner.

There are many challenges for stakeholders in Geo-ICT and GDI. Practical tools and methods must be complemented by people having the capacity to deal with the implementation of a sound geo-information policy. In addition, it is a question of how to prepare and make rational, information-based, and ultimately appropriate, government, management and business decisions. This will require further understanding of the impacts of Geo-ICT on economics and capacity building.

Literature Consulted

  • Blakemore, M. (2000), Financing the NGDI, In: NGDI: Towards a Road Map for India, pp. 31-39, Regional and Global Infrastructure Experiences.
  • Castells, M. (1996), The Information Age: Economy, Society and Culture, Vol. I, The Rise of the Network Society, ISBN 1-55786-617-1, Blackwell Publishers.
  • Groot, R. (2001), Economic Issues in the Evolution of National Geospatial Data Infrastructure, Background Paper for the 7th United Nations Regional Cartographic Conference for the Americas.
  • Groot, R. and Y. Georgiadou (2001), Beyond Education: Capacity Building for Geoinformatics, In: GIM International, Nov 2001.
  • Groot, R. and J. McLaughlin (2000), Geospatial Data Infrastructure, Concepts, Cases and Good Practice, Oxford University Press.
  • Molen, P. van der (2001a), Some Considerations on Benchmarking Cadastral Systems and the Role of “Cost Recovery”, Paper Prepared for the FIG Commission 7, Gävle, Sweden.
  • Molen, P. van der (2001b), Cost Recovery for Land Administration, In: Survey Review, 36, 282, pp. 241–248.
  • Nijkamp, P. and A.S. Verrips (2000), Overheidsinformatie zonder Drempels, ESB, 16-6-2000 (in Dutch).
  • Opoku-Mensah, A. (1998), ICT Initiatives and the Role of Policies in Southern Africa, from Information and Communication Technology and Development, RAWOO Publication No. 18, ISBN 90-71367-26-6.
  • PriceWaterhouse (1995), Australian Land and Geographic Infrastructure Benefits Study.
  • Salazar, R. and W.T. de Vries (2001), Towards a Geospatial Information Infrastructure in Ecuador, GIM International, Vol. 15, No. 6, June 2001, pp. 44-47.

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